Microsoft Secures Call of Duty on PlayStation as Acquisition Nears Completion
Updated: Jan 2
[Edited] In a historic tech acquisition, Microsoft has finalized its purchase of video game-maker Activision Blizzard for a staggering $69 billion.
The completion of this deal could have far-reaching implications for the entire video game industry.
The announcement that the deal had gone through came just hours after Microsoft received final approval from Britain's competition watchdog. This reversal of the earlier decision to block the merger removed the last obstacle for the transaction.
This acquisition of studios behind popular games like Call of Duty, Diablo, and Overwatch will undoubtedly give a significant boost to Microsoft's Xbox gaming console. Currently ranking third in sales behind Sony's PlayStation and Nintendo, Microsoft aims to integrate Activision titles into its multi-game subscription service, which operates similarly to Netflix for video games.
The nearly 22-month process to close the deal reflects concerns from rivals and government regulators who feared that Microsoft would use its growing collection of games to stifle competition. This consolidation is part of a broader trend in the industry that has independent game developers worried about being overshadowed by blockbuster franchises with a history of success.
While the deal still faces opposition from the U.S. Federal Trade Commission (FTC), Microsoft remains confident in its benefits for the gaming community. Phil Spencer, CEO of Microsoft's Xbox division, stated, "Whether you play on Xbox, PlayStation, Nintendo, PC, or mobile, you are welcome here – and will remain welcome, even if Xbox isn't where you play your favorite franchise."
The FTC continues to express concerns about the deal, believing it poses a threat to competition. FTC spokesperson Victoria Graham stated, "The FTC continues to believe this deal is a threat to competition."
Despite the opposition, Microsoft has consistently defended the deal, emphasizing its goal of expanding access to Activision games across multiple platforms rather than limiting them to rival console-makers.
The approval from the U.K.'s Competition and Markets Authority was expected, as it had given preliminary approval last month to a revised Microsoft proposal aimed at addressing concerns about competition and the emerging cloud gaming market.
However, this approval also tips the balance of power significantly in Microsoft's favor. George Jijiashvili, senior principal analyst at tech research and advisory firm Omdia, believes that Microsoft now has a significant opportunity to shape the future of the games industry.
Since the announcement of the deal in January 2022, Microsoft has obtained approvals from antitrust authorities in over 40 countries. Crucially, it received approval from the European Union after agreeing to allow users and cloud gaming platforms to stream its titles without paying royalties for a decade.
The deal faced the strongest resistance from British and American regulators, with Sony also expressing concerns about limited access to Call of Duty for PlayStation gamers.
To secure the U.K.'s approval, Microsoft will sell European cloud streaming rights for all current and future Activision games released over the next 15 years to French game studio Ubisoft Entertainment.
While the U.K. regulator praised the structural remedy imposed on Microsoft, it criticized the way the agreement came together and warned other companies against using similar tactics.
With this acquisition, Microsoft surpasses Dell's record for the priciest tech deal, previously held when it acquired data-storage company EMC for around $60 billion in 2016. Microsoft's own largest deal prior to this was its $26 billion acquisition of professional-networking service LinkedIn.
Activision, founded in 1979, has created or acquired many popular video games, including Pitfall, Guitar Hero, and the World of Warcraft franchise. Bobby Kotick, CEO since 1991, signaled his departure but will remain as CEO of the Microsoft subsidiary until the end of 2023.
The completion of this deal marks a significant milestone for Microsoft and the gaming industry as a whole. With the integration of Activision Blizzard, Microsoft aims to shape the future of gaming and provide gamers with a diverse and inclusive experience across various platforms.
Microsoft completes its $69 billion acquisition of Activision Blizzard, marking one of the most expensive tech acquisitions in history.
The deal faced opposition from regulators and rivals concerned about competition and consolidation in the gaming industry.
Microsoft aims to boost its Xbox gaming console and expand its multi-game subscription service with Activision titles.
Source: AP NEWS